Written by Kevin Wood. 4 min read.
If you’re in human resources, have a learning and development position, or are an independent trainer or consultant in these areas, you probably know the value of planned training and development initiatives for your employees.
But when economies slow and budgets tighten, the training and development budget is often one of the first things to be cut.
Compared to manufacturing, sales, and other revenue generating parts of the business, many leaders have a hard time recognizing the positive, direct return on investment of learning and development initiatives.
The problem with cutting budgets based solely on direct ROI is that your employees, your people, are your biggest asset. But people aren’t machines where you can easily measure the direct ROI of their output.
However, the more you know about the different types of value that training and development provide (e.g. the psychological, financial, and emotional value), the better you can help others understand it—and understand why it’s a needed investment even when (especially when) budgets are slim.
Psychological value of training and development
“One of the ways that training and development workshops have a psychological value is in their ability to inculcate a growth mindset,” says Robin Robbins, Managing Director of The Myers-Briggs Company in Singapore.
“Developmental training sessions facilitate creating a positive mindset. They make you think big. When you change the way you see things, the things that you do will change. As the saying goes ‘the real voyage of discovery consists not in seeking new landscapes, but in having new eyes.’
If you’re not familiar with the term, a growth mindset is when you believe you can acquire almost any ability with enough work. With a growth mindset, you’re more likely to roll up your sleeves and push forward in the face of challenges and setbacks and achieve success.
Another value of training and development workshops is that it increases psychological safety within a team or working group. Psychological safety in the workplace is when employees believe that there won’t be any negative consequence for speaking up with questions, ideas, or pointing out mistakes. It’s the belief that your fellow team members won’t embarrass or reject you in some way when you bring something up that may go against the majority’s ideas or even cause conflict.
“When you have psychological safety in the workplace, people feel comfortable being themselves. They bring their full selves to work and feel OK laying all of themselves on the line,” notes David Altman, our Chief Research and Innovation Officer at the Center for Creative Leadership, in this article about psychological safety
Trainings and workshops that reveal similarities and differences in a non-confrontational language and help people understand each other foster trust. Team members get to know each other on a deeper level and can foster closer bonds.
And with that trust, mutual understanding, and common language, psychological safety on a team increases.
Financial and emotional value of training and development
Training and development workshops and courses also add financial value for the team and the organization in two ways. The first is employee retention. The second is a decreased time spent on conflict.
On average, it costs between 50% and 150% of an employee’s salary to replace them. And if you’re talking about upper management and executives, the cost can rise to over three times that employee’s salary. This doesn’t take into account the lost productivity or the tribal knowledge that leaves with the employee when they walk out the door. Investing in employee development helps with employee retention because employees feel more valued. They see the immediate investment that the organization is making in them as individuals.
“It’s the little things that make employees feel appreciated. One way to make them feel appreciated is to address growth opportunities as employees want to know what the future holds for their careers. And investing in their development does just that,” says Robbins.
“It’s also important to show people a meaningful sense of appreciation. Investing in a training they can apply in and out of the workplace (such as around personality type or interpersonal needs) is a way to show you appreciate the employee as a whole person and acknowledge their lives outside of the office. When employees experience gratitude and meaningful appreciation from their employers, they become more productive.
Bonus tip: Plan to revisit trainings on a regular basis
The most effective training programs aren’t completed in just one session. As with most things you learn, the knowledge becomes more valuable if you’re able to revisit it and then apply it over time.
By revisiting what’s been learned, employees are able to process the information with a little perspective. They’ve had more experience after the learnings which they can look back on and apply what they learned.
“Having some sort of plan to revisit the learnings shows individuals that you’re still invested in engaging with them, and that they’re still important and the learnings from the workshop are still valuable and applicable,” says Dr. Marta Koonz, MBTI Master Practitioner and Sr. Consultant for The Myers-Briggs Company.